As filed with the Securities and Exchange Commission on March 17, 1997.
Registration Statement No. 333-________
================================================================================
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-3 REGISTRATION STATEMENT
Under the Securities Act of 1933
---------------
SPECIALIZED HEALTH PRODUCTS INTERNATIONAL, INC.
(Exact Name of Registrant as specified in its charter)
Delaware 93-0945003
(State or other jurisdiction (I.R.S. Employer's
of incorporation or organization) Identification Number)
---------------
SPECIALIZED HEALTH PRODUCTS INTERNATIONAL, INC.
655 East Medical Drive
Bountiful, UT 84010 (801) 298-3360
(Address, including zip code and telephone number, including area code, of
Registrant's principal executive office)
-----------------
Eric L. Robinson
BLACKBURN & STOLL, LC
77 West Second South, Suite 400
Salt Lake City, UT 84101 (801) 521-7900
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------
Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. |X|
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------- ----------------------- ----------------------- ----------------------- ----------------------
Proposed Proposed
Title of Each Class of Amount Maximum Maximum Amount of
Securities to be to be Offering Price Aggregate Registration
Registered Registered Per Share(1) Offering Price(1) Fee
- ------------------------- ----------------------- ----------------------- ----------------------- ----------------------
- ------------------------- ----------------------- ----------------------- ----------------------- ======================
<S> <C> <C> <C> <C>
Common Stock(2) 5,959,603 $2.98 (3) $17,759,617 $5,381.70
Common Stock(4) 5,845,250 $2.98 (3) $17,418,845 $5,278.44
Total $10,660.14
- ------------------------- ----------------------- ----------------------- ----------------------- ======================
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee.
(2) Outstanding shares of Common Stock offered for sale from time to time by
Selling Security holders.
(3) Represents the average of the bid and asked prices of the Common Stock on
the NASDAQ Small Cap Market on March 11, 1997. Fees were calculated under
Rule 457(c) under the Securities Act of 1933.
(4) Issuable by the Registrant from time to time upon the exercise of
outstanding warrants and stock options.
The registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission acting pursuant to said Section 8(a),
may determine.
================================================================================
================================================================================
<PAGE>
SPECIALIZED HEALTH PRODUCTS INTERNATIONAL, INC.
CROSS-REFERENCE SHEET
<TABLE>
<CAPTION>
Item Number of Caption Location or Heading in Prospectus
<S> <C>
1. Forepart of Registration Statement and Outside
Front Cover of Prospectus.................. Outside Front Page of Registration Statement and Outside Front
Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages of
Prospectus................................. Inside Front and Outside Back Cover Page of Prospectus
3. Summary Information, Risk Factors and Ratio of
Earnings to Fixed Charges.................. Prospectus Summary and Risk Factors
4. Use of Proceeds............................ Use of Proceeds
5. Determination of Offering Price............ Not Applicable
6. Dilution................................... Not Applicable
7. Selling Security Holders................... Principal and Selling Securityholders
8. Plan of Distribution....................... Plan of Distribution
9. Description of Securities to be
Registered................................. Not Applicable
10. Interest of Named Experts and Counsel...... Not Applicable
11. Material Changes........................... Material Changes
12. Incorporation of Certain Information by
Reference.................................. Incorporation of Certain Documents by Reference
13. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities................................ Not Applicable
</TABLE>
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior an to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or the
solicitation of offer to buy nor shall there be any sale of these securities in
any State in which such offer, solicitation or sale would be unlawful prior to
registration or qualification
<PAGE>
SUBJECT TO COMPLETION, DATED MARCH 17, 1997.
PRELIMINARY PROSPECTUS
11,804,853 Shares of Common Stock
SPECIALIZED HEALTH PRODUCTS INTERNATIONAL, INC.
This prospectus relates to (1) the offer and sale from time to time of up
to 5,959,603 shares of common stock, $.02 par value ("Common Stock"), of
Specialized Health Products International, Inc. (the "Company") by certain
stockholders of the Company named herein (the "Selling Stockholders"); (2) the
offer and sale from time to time by the warrantholders named herein of up to
4,401,250 shares of Common Stock (the "Warrant Stock") issuable to such
warrantholders upon exercise of the Series A Warrants and Series B Warrants
(collectively, the"Warrants") during the term of the Warrants; and (3) the offer
and sale from time to time by the stock option holders named herein (the
"Selling Option Holders") of up to 1,444,000 shares of Common Stock (the "Option
Stock") issuable to such stock option holders upon exercise of the stock options
(collectively, the "Stock Options") during the term of the Stock Options. The
Common Stock, Warrant Stock and Option Stock are referred to collectively as the
"Securities." The Selling Stockholders, selling Warrant Stockholders and Selling
Option Holders named herein are referred to collectively as the "Selling
Securityholders." See "Principal and Selling Securityholders." With the
exception of 319,190 shares of Option Stock offered hereby, the Securities being
registered pursuant to this Offering were registered for resale in a Form S-1
registration statement that was declared effective by the Securities and
Exchange Commission on July 19, 1996.
The Common Stock is quoted on the NASD Automated Quotation ("Nasdaq")
Small-Cap Market under the trading
symbol "SHPI." On March 10, 1997, the closing price of the Common Stock, as
reported by Nasdaq was $3.06 per share.
---------------
The Securities offered hereby involve a high degree of risk. See "Risk
Factors" on page 4 of the Prospectus.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------
The Common Stock offered hereby may be sold from time to time on Nasdaq
through brokers, dealers, underwriters or agents, and also in
privately-negotiated sales by the Selling Securityholders named herein, on terms
to be determined at the times of such sales. See "Principal and Selling
Securityholders." The Company is registering the Common Stock pursuant to the
Company's obligations under certain registration rights agreements, but the
registration of the Securities does not necessarily mean that any of the
Securities will be offered or sold by the Selling Securityholders hereunder. To
the extent required, the specific Securities to be sold, the names of the
Selling Securityholders, the respective purchase prices and public offering
prices, the names of any broker, dealer, underwriter or agent, and any
applicable commissions or discounts with respect to a particular offer will be
set forth in an accompanying Prospectus Supplement or, if appropriate, a
post-effective amendment to the Registration Statement to which this Prospectus
is a part. See "Plan of Distribution."
The Selling Securityholders and any dealers or agents that participate in
the distribution of the Securities offered hereby may be deemed to be
"underwriters" as defined in the Securities Act of 1933, as amended (the
"Securities Act") and any profit on the sale of the Securities offered hereby by
them and any discounts, commissions or concessions received by any such dealers
or agents might be deemed to be underwriting discounts and commissions under the
Securities Act.
The Company will receive no proceeds from the sale of the Securities by the
Selling Securityholders hereunder, but the Company has agreed to bear certain
expenses of registration of such Securities under federal and state securities
laws. The Company will receive up to $14,935,664 in proceeds when and if the
Warrants and Stock Options are exercised.
---------------
The date of this Prospectus is March 17, 1997
<PAGE>
AVAILABLE INFORMATION
The Company, with principal executive offices at 655 East Medical Drive,
Bountiful, Utah 84010, telephone number (801) 298-3360, is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith files reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). Reports, proxy statements and other information filed by the
Company can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following regional offices of the
Commission: Seven World Trade Center, 13th Floor, New York, New York, 10048; and
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material can also be obtained from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
at prescribed rates and the Commission's web site located at http://www.sec.gov.
The Company has filed with the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, a Registration Statement under the Securities Act of
1933, as amended, with respect to the Securities offered hereby. This Prospectus
does not contain all the information set forth in the Registration Statement,
certain items of which are contained in schedules and exhibits to the
Registration Statement as permitted by the rule and regulations of the
Commission. For further information, reference is hereby made to the
Registration Statement, including the schedules and exhibits filed as a part
thereof, which may be obtained from the Commission upon payment of the fees
prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December 31,
1995, the Company's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1996, June 30, 1996 and September 30, 1996 and the Company's Current Reports
on Form 8-K dated August 26, 1996 and October 14, 1996, each of which has been
filed by the Company with the Commission, are incorporated herein by reference.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the offering of the Common Stock shall be deemed
to be incorporated by reference in this Prospectus and to be a part hereof from
the date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference in this
Prospectus shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any document incorporated by reference in this Prospectus, other than exhibits
to any such documents not specifically described above. Requests for such
documents should be directed to Specialized Health Products International,
medical Inc., 655 East Medical Drive, Bountiful, Utah 84010, Attention: Investor
Relations (Telephone Number (801) 298-3360).
2
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information included elsewhere in this Prospectus. Unless the context otherwise
requires, all references in this Prospectus to the "Company" shall mean
Specialized Health Products International, Inc., and its subsidiaries on a
consolidated basis and, where the context so requires, shall include its
predecessors.
THE COMPANY
The Company is engaged principally in the development of cost-effective,
disposable, proprietary healthcare products and systems designed to reduce the
spread of disease and the incidence of accidental injury in the healthcare
industry. At present, the Company is focusing its resources and activities
principally on the design and development of new products designed to minimize
the risk of the spread of HIV/AIDS, hepatitis B and other blood-borne diseases
through accidental needlesticks, the development of other medical products and
the marketing of its current products used for the disposal of contaminated
"sharps". The Company intends to principally use third parties to manufacture,
market and distribute its products.
The Company is a Delaware corporation with its principal executive offices
at 655 East Medical Drive, Bountiful, UT 84010. Its telephone number is (801)
298-3360.
THE OFFERING
The principal terms of the Securities offered hereunder are summarized
below. The Selling Securityholders will receive all the proceeds from the sale
of the Common Stock.
Common Stock:
Securities Offered..............................11,804,853 shares of Common
Stock, including 5,959,603
shares of outstanding Common
Stock which may be sold by
Selling Securityholders, up to
4,401,250 shares of Common
Stock which may be sold by the
holders of outstanding Warrants
following exercise of such
Warrants, and up to 1,444,000
shares of Common Stock which
may be sold by the holder of
the outstanding stock options
following the exercise of such
stock options.
Rights of Common Stock ..........................The shares of Common Stock
share equally in all rights of
the Common Stock, including,
without limitation, dividend
and voting rights.
Quotation .......................................The Common Stock is quoted on
the Nasdaq Small-Cap Market.
Trading Symbol .................................."SHPI"
3
<PAGE>
RISK FACTORS
An investment in the Securities of the Company is speculative in nature,
involves a high degree of risk and should only be made by an investor who can
afford the loss of his entire investment. The following factors should be
considered carefully by potential purchasers in evaluating an investment in the
Common Stock of the Company offered hereby.
History of Losses/Uncertain Profitability. At December 31, 1996, the
Company had an accumulated deficit of approximately $7,946,856. The Company has
only limited sales of its SafetyCradle(R) sharps containers which was the only
product marketed through December 31, 1996. The Company's products are in
various stages of production, pre-production, development and research. The
Company's only commercialized products are its SafetyCradle(R) sharps containers
and the ExtreSafe(TM) Lancet Strip. There is no assurance the products will ever
be commercially viable and no assurance can be given that the Company will ever
have sufficient sales or a sufficient customer base to become profitable. In
addition, the business prospects of the Company will be affected by expenses,
operational difficulties and other factors frequently encountered in the
development of a business enterprise in a competitive environment, many of which
may be unforeseen and beyond the Company's control.
Need for Additional Funds. The Company believes that its current cash
reserves, together with operating revenues and existing financing commitments,
will be sufficient to support its operations for the next several months. The
Company is in the process of attempting to raise approximately $2.25 million
from certain of its current shareholders and other accredited investors in a
private placement (the "Private Placement"). See "Material Changes." The Company
believes that if it successfully raises $2.25 million in the Private Placement,
the proceeds of the offering will be sufficient to support operations during the
next year. However, the Company's need for capital during the next year or more
will vary based upon a number of factors, including the rate at which demand for
products expands, the level of sales and marketing activities for the Safety
Cradle(R) sharps container and ExtreSafe(TM) Lancet Strip products, and the
level of effort needed to develop and commercialize the Safety Cradle(R), and
ExtreSafeO medical needle withdrawal technology, intravenous flow gauge and
blood collection devices. Moreover, the Company's business plans may change or
unforeseen events may occur which require the Company to raise additional funds.
If additional funds are not successfully raised in the Private Placement the
lack of additional funds will likely have a material adverse effect on the
Company.
Market Overhang. At commencement of this Offering, there will be (a)
8,744,153 shares of Common Stock outstanding (8,456,153 shares of which may be
sold pursuant to a current registration statement or an exemption from
registration), and (b) Warrants and Option Stock exercisable for 5,845,250
shares of Common Stock (all of said shares of Common Stock underlying said
Warrants and Stock Options may be sold pursuant to a current registration
statement). Thus, upon completion of this Offering, assuming that all of the
Warrants and Option Stock are exercised, there will be 14,481,403 shares of
Common Stock outstanding, of which 14,193,403 shares will be registered or
effectively free trading. The sale of a substantial part of these securities
could adversely affect the market price of the Common Stock, which may hinder
any future efforts of the Company to raise capital.
See "Principal and Selling Securityholders."
Dependence on Single Manufacturer. The Company's SafetyCradle(R) sharps
containers and ExtreSafe(TM) Lancet Strip are the only products available for
sale. Each of said products is produced by a single manufacturer. If one of the
Company's manufacturers fails to perform its obligations in a timely and
satisfactory manner or if there is a change in the Company's manufacturers, it
could have a material adverse effect on the Company. There can be no assurance
that the Company would be successful in replacing its current manufacturers on
terms favorable to the Company. Likewise, there can be no assurance that the
Company will be successful in finding additional manufacturers to manufacture
its products on terms favorable to it, should product demand increase. The
Company, however, owns the molds and automated equipment which can be moved to
different manufactures.
Dependence On Single Distributor for Sharps Containers. The Company has
entered into an exclusive distribution agreement (the "Agreement") with Becton,
Dickinson and Company ("BD") relating to the Company's Safety Cradle(R) sharps
container products (the "Products"). The Agreement presents certain risks to the
Company, including: (i) reliance for sale of the Products on BD, and therefore
reliance on BD's marketing ability, marketing plans and credit-worthiness; (ii)
if the Products are marketed under BD's label, goodwill associated with the
Products may inure to the benefit of BD rather than the Company; (iii) the
4
<PAGE>
Company has only limited protection from changes in manufacturing costs (other
than raw materials costs) during the initial term of the Agreement; and (iv) if
the Company is reliant on BD for all or substantially all of its sales, the
Company may be restricted in its ability to effectively negotiate with BD for
renewal of the Agreement.
In addition, the Company will be dependent on third parties for the
distribution of its ExtreSafe(TM) Lancet Strip and follow-on products.
Negative Pricing Pressures on the Company's Safety Products. Pricing for
the Company's products may be higher than for their conventional counterparts
which are not designed to provide the protection afforded by the Company's
products. Continuing pressure from third party payors to reduce costs in the
health care industry as well as increasing competition from other protective
products could affect the Company's ability to sell its products at premium
prices. Reductions in selling prices could adversely affect operating margins if
the Company cannot achieve corresponding reductions in manufacturing costs.
However, compared to the pricing of competitive safety products the pricing of
the Company's products is competitive.
Price Fluctuations of Resins. The Company uses polypropylene and other
resins in the manufacture of its products. Prices are subject to fluctuations
caused in part by changes in supply and demand. Significant increases in the
prices of these resins could have a material adverse effect on the financial
condition of the Company.
Rapidly Changing Technology. The Company is presently in various stages of
production, pre-production, development and research with respect to its Safety
Cradle(R) sharps containers, ExtreSafe(TM) Lancet Strip, ExtreSafeO medical
needle retraction technology, intravenous flow gauge system, blood collection
devices, filmless digitized imaging technology and other products. There is no
assurance that development of superior competing products and changes in
technology will not eliminate the need for the Company's products. The
introduction of competing products could adversely affect the Company's attempts
to develop and market its products successfully.
Lack of Market Acceptance. The use of safety medical products, including
the Company's products, is relatively new. The Company's products may not be
accepted by the market. Market acceptance of the Company's products will depend
in large part upon the Company's ability to demonstrate the operational
advantages, safety, efficacy, and cost-effectiveness of its products compared to
competing products and its ability to distribute through major medical
distributors. There can be no assurance that all the Company's products will
achieve market acceptance or that major distributors will sell the Company's
products.
Dependence on Continued Research and Development. The ExtreSafeO medical
needle withdrawal technology, intravenous flow gauge system, phlebotomy device
and filmless digitized imaging technology are still in various stages of
development. The Company is also exploring additional applications for all of
its products. The continued development of its products and development of
additional applications therefore is important to the long-term success of the
Company. There can be no assurance that all of such applications or products
will be developed or, if developed, that they will be successful.
Dependence on Patents and Proprietary Rights. The Company's future success
depends in part on its ability to protect its intellectual property and maintain
the proprietary nature of its technology through a combination of patents and
other intellectual property arrangements. There can be no assurance that the
protection provided by patents, if issued, will be broad enough to prevent
competitors from introducing similar products or that such patents, if
challenged, will be upheld by the courts of any jurisdiction. Patent
infringement litigation, either to enforce the Company's patents or defend the
Company from infringement suits, would be expensive and, if it occurs, could
divert Company resources from other planned uses. Any adverse outcome in such
litigation could have a material adverse effect on the Company. Patent
applications filed in foreign countries and patents in such countries are
subject to laws and procedures that differ from those in the United States.
Patent protection in such countries may be different from patent protection
under U.S. laws and may not be as favorable to the Company. The Company also
attempts to protect its proprietary information through the use of
confidentiality agreements and by limiting access to its facilities. There can
be no assurance that the Company's program of patents, confidentiality
agreements and restricted access to its facilities will be sufficient to protect
the Company's proprietary technology from competitors.
5
<PAGE>
Ability to Manage Expanding Operations. The Company intends to pursue a
strategy of rapid growth. The Company plans to significantly expand its product
lines and to devote substantial resources to operations and research and
development support areas, including marketing and administrative services.
There can be no assurance that the Company will obtain sufficient manufacturing
capacity on favorable terms, attract qualified personnel or successfully manage
such expanded operations. The failure to properly manage growth could have a
material adverse effect on the Company.
Potential Inability of the Company to Compete. The Company is engaged in a
highly competitive business and will compete directly with firms that have much
longer operating histories, substantially greater financial resources and
experience, greater size, more substantial research and development and
marketing organizations and established distribution channels and that are
better situated in the market than the Company. Such competitors may use their
economic strength to influence the market to continue to buy their existing
products. The Company does not have an established customer base and is likely
to encounter a high degree of competition in developing a customer base. One or
more of these competitors could use such resources to improve their current
products or develop new products that may compete more effectively with the
Company's products. New competitors may arise and may develop products which
compete with the Company's products. No assurance can be given that the Company
will be successful in competing in its business.
Product Liability. The sale of medical devices entails an inherent risk of
liability in the event of product failure or claim of harm caused by product
operation. There can be no assurance that the Company will not be subject to
such claims, that any claim will be successfully defended or if the Company is
found liable, that the claim will not exceed the limits of the Company's
insurance. The Company maintains product liability insurance. There is no
assurance that the Company will maintain product liability insurance on
acceptable terms in the future. Product liability claims could have a material
adverse effect on the Company.
Adverse Effect of Regulation Relating to Medical Products. Regulation is a
significant factor in the development and marketing of the Company's products
and in the Company's ongoing manufacturing and research and development
activities.
The Company's Safety Cradle(R) sharps container products are Class II
devices under the regulatory structure of the Federal Food, Drug, and Cosmetic
Act (the "FD&C Act") which is administered by the United States Food and Drug
Administration ("FDA"). The Company has acquired FDA approval of a 510(k)
pre-market clearance submission on its Safety Cradle(R) sharps container which
supports its marketing and selling of its Safety Cradle(R) sharps container
products subject to ongoing regulatory controls by the FDA. Among other things,
the FDA requires adherence to certain "Good Manufacturing Practices" ("GMP")
regulations that include validation testing, quality assurance, quality control
and documentation procedures. In addition, performance standards could be
promulgated by the FDA that the Company's Safety Cradle(R) sharps containers
would be required to meet. Failure to meet those standards would require the
Company to discontinue the marketing of the product. In addition, future
regulations may be imposed which might have a material adverse effect on the
Company and/or one or more of its products. Furthermore, since the FDA
continually regulates and inspects medical devices and their manufacture, any
actual or potential product failure could result in the imposition of
administrative and/or judicial sanctions, including product recall, which might
have a material adverse effect on the Company.
In addition to the foregoing, the Occupational Safety and Health
Administration ("OSHA") requires, in part, that sharps containers be closeable,
disposable, puncture-resistant, leak proof on the sides and bottom, and
appropriately labeled. The Company's Safety Cradle(R) sharps containers meet
said requirements. Future regulations may be imposed which might have a material
adverse effect on the Company and/or one or more of its products.
The Company's ExtreSafe(TM) Lancet Strip is a Tier I Class I device. No
pre-market approval or notification is required before the ExtreSafe(TM) Lancet
Strip is sold. The Company must adhere to GMP regulations, however, in
connection with its manufacture of the ExtreSafe(TM) Lancet Strip.
The Company's follow-on products (the ExtreSafeO medical needle withdrawal
technology, intravenous flow gauge and other blood collection devices) are still
in the development stage. The Company expects its follow-on products to be Class
II devices. The Company expects that its follow-on products be eligible for
pre-market clearance through the 510(k) notification procedure based upon their
substantial equivalence to previously marketed devices. There can be no
assurance that the Company will obtain 510(k) pre-market clearance to market its
6
<PAGE>
follow-on products, or that the Company's follow-on products will be classified
as described above, or that, in order to obtain 510(k) pre-market clearance, the
Company will not be required to submit additional data or meet additional FDA
requirements that may substantially delay the 510(k) process and wazzu add to
the Company's expenses.
If any of the Company's follow-on products do not qualify for the 510(k)
procedure (either because it is not substantially equivalent to a legally
marketed device or because it is a Class III device), the FDA must approve a
pre-market approval ("PMA") application before marketing can begin. PMA
applications must demonstrate, among other matters, that the medical device is
safe and effective. A PMA application is typically a complex submission, usually
including the results of clinical studies, and preparing an application is a
detailed and time-consuming process. Once a PMA application has been submitted,
the FDA's review may be lengthy and may include requests for additional data. By
statute and regulation, the FDA may take 180 days to review a PMA application,
although such time may be extended. Furthermore, there can be no assurance that
a PMA application will be reviewed within 180 days or that a PMA application
will be approved by the FDA.
In March 1995, the FDA issued a draft guidance document on 510(k)
notifications for medical devices with sharps injury prevention features, a
category that would cover the Company's follow-on products. The draft guidance
provisionally placed this category of products into Tier 3 for purposes of
510(k) review, meaning that such products will be subject to the FDA's most
comprehensive and rigorous review for 510(k) products. However, review under
this classification is expedited. The draft guidance also states that in most
cases, FDA will accept, in support of a 510(k) notification, data from tests
involving simulated use of such a product by healthcare professionals, although
in some cases that agency might require actual clinical data.
The process of obtaining required regulatory clearances or approvals can be
time-consuming and expensive, and compliance with the FDA's GMP regulation and
other regulatory requirements can be burdensome. Moreover, there can be no
assurance that the required regulatory clearances will be obtained, and such
clearances, if obtained, may include significant limitations on the uses of the
follow-on products in question. In addition, changes in existing regulations or
guidelines or the adoption of new regulations or guidelines could make
regulatory compliance by the Company more difficult in the future. The Venture
(defined below) must also meet FDA requirements before marketing the filmless
digitized imaging technology. The failure to comply with applicable regulations
could result in fines, delays or suspensions of clearances, seizures or recalls
of products, operating restrictions and criminal prosecutions, and would have a
material adverse effect on the Company.
Distribution of the Company's products in countries other than the United
States may be subject to regulation in those countries. There can be no
assurance that the Company will obtain the approvals necessary to market any of
its products outside the United States.
Uncertainty in the Health Care Industry. The health care industry is
subject to changing political, economic and regulatory influences that may
affect the procurement practices and operations of health care facilities.
During the past several years, the health care industry has been subject to
increased government regulation of reimbursement rates and capital expenditures.
Among other things, third party payors are increasingly attempting to contain
health care costs by limiting both coverage and reimbursement levels for health
care products and procedures. Because the price of the Company's products may
exceed the price of conventional products the cost control policies of third
party payors, including government agencies, may adversely affect use of the
Company's products. The cost associated with the needlesticks, however, exceeds
the procurement costs.
There are numerous proposals to reform the U.S. health care system and
health care systems of various states. Many of these proposals seek to increase
government involvement in health care, lower reimbursement rates, contain costs
and otherwise change the operating environment for the Company's customers.
Health care providers may react to these proposals and the uncertainty
surrounding such proposals by curtailing or deferring investments in new
technology, including the Company's products. The Company cannot predict what
impact, if any, such proposals or health care reforms might have on the
Company's financial condition and results of its operations.
Dependence on Key Personnel. The success of the Company depends upon the
skills, experience and efforts of its management. Should the services of one or
more members of its present management become unavailable to the Company for any
reason, the business of the Company could be adversely affected. The Company
does not have noncompetition agreements in place with its key personnel.
7
<PAGE>
Market Volatility. Market prices of securities of medical technology
companies are highly volatile from time to time. The market price of the
Company's securities may be significantly affected by factors such as the
announcement of new product or technical innovations by the Company or its
competitors, changes in the regulatory environment, or by other factors that may
or may not relate directly to the Company. Sales of substantial amounts of
Common Stock (including stock which may be issued upon exercise of warrants
and/or Stock Options), or the perception that such sales may occur, could
adversely affect prevailing market prices for the Common Stock.
Potential Negative Impact of Earn-Out Shares. John T. Clarke, David A.
Robinson and Bradley C. Robinson (collectively, the "Founders"), who are
respectively a former Director; the President, Chief Executive Officer, Chairman
of the Board and a Director; and a Vice President and Director of the Company,
have the opportunity to receive up to an aggregate of 2,000,000 additional
shares of common stock (the "Earn-Out Shares"). The Founders have the right to
divide the Earn-Out Shares among themselves or their assigns, if earned, based
on performance, contributions to the Company and/or other factors relating to
the business success of the Company. Any issuance of Earn-Out Shares would be
based upon the level of pre-tax consolidated net income, adjusted to exclude any
expense arising from the obligation to issue or the issuance of the Earn-Out
Shares and any income or expense associated with non-recurring or extraordinary
items as determined in accordance with generally accepted accounting principles
("Adjusted PTNI").
The Company expects that the issuance of Earn-Out Shares will be deemed to
be the payment of compensation to the recipients and will result in a charge to
the earnings of the Company in the year or years the Earn-Out Shares are earned,
in an amount equal to the fair market value of the Earn-Out Shares. This charge
to earnings could have a substantial negative impact on the earnings of the
Company in the year or years in which the compensation expense is recognized.
The effect of the charge to earnings associated with the issuance of
Earn-Out Shares could place the Company in a net loss position for the relevant
year, even though the Adjusted PTNI was at a level requiring the issuance of
Earn-Out Shares. Because Earn-Out Shares are issuable based on the results of a
single year, the Adjusted PTNI in a particular year could require the issuance
of Earn-Out Shares even though the cumulative Adjusted PTNI for the three years
1996, 1997 and 1998, or any combination of those years, could reflect a lower
amount of Adjusted PTNI that would not require the Company to issue such
Earn-Out Shares or even a loss at the Adjusted PTNI. There is no assurance that
years subsequent to the year or years in which Earn-Out Shares are issued will
produce the same level of Adjusted PTNI or will be profitable. The management of
the Company may have the discretion to accelerate or defer certain transactions
that could shift revenue or expense between years or otherwise affect the
Adjusted PTNI in any year or years.
The Company has agreed to file a registration statement under the
Securities Act with respect to the Earn-Out Shares, when issued. The issuance of
the Earn-Out Shares, or the perception that the issuance of such stock may
occur, could adversely affect prevailing market prices for the Common Stock.
No Dividends. The Company has not paid dividends since its inception and
does not intend to pay any dividends in the foreseeable future. No assurance can
be given that it will pay dividends at any time. The Company presently intends
to retain future earnings, if any, for financing the growth and expansion of the
Company.
Limitations on Director Liability. The Company's Certificate of
Incorporation provides, as permitted by governing Delaware law, that a director
of the Company shall not be personally liable to the Company or its stockholders
for monetary damages for any action or failure to take any action, with certain
exceptions. These provisions may discourage stockholders from bringing suit
against a director for breach of duty and may reduce the likelihood of
derivative litigation brought by stockholders on behalf of the Company against a
director. In addition, the Company has agreed and its Certificate of
Incorporation and Bylaws provide, for mandatory indemnification of directors and
officers to the fullest extent permitted by Delaware law and has entered into
contracts with its directors and officers providing for such indemnification.
Possible Delisting of Securities from Nasdaq System. Trading of 8,456,153
shares of the Company's Common Stock is currently conducted on the Nasdaq
Small-Cap Market System. In order to continue to qualify its Common Stock for
quotation on the Nasdaq Small-Cap Market, a company must have, among other
8
<PAGE>
things, at least $2,000,000 in total assets, $1,000,000 in capital and surplus
and a minimum bid price for its common stock of $1.00 per share. The Company has
approximately $2,000,000 in total assets on the date hereof. If the Private
Placement is not successful then the Company's total assets are likely to drop
below the $2,000,000 threshold and the Company will be subject to delisting. In
addition, the listing criteria may change and there is no assurance that the
Company will meet new requirements, if any.
In the event of such delisting, trading, if any, in the Company's
securities would be expected to be conducted on the over-the-counter market in
what is commonly referred to as the "pink sheets" or the "Electronic Bulletin
Board." As a result, an investor may find it more difficult to dispose of, or to
obtain accurate quotations as to the price of, the Company's securities. The
loss of continued quotation on the Nasdaq System may also cause a decline in
share price, loss of news coverage of the Company and difficulty in obtaining
subsequent financing.
No Control Over Market Making. No person is under any obligation to make a
market in the Company's Common Stock and any person making a market in the
Common Stock may discontinue market making activities at any time without
notice. There can be no assurance that an active public market for the Common
Stock will continue.
Anti-Takeover Provisions of Certificate and Bylaws. The Certificate of
Incorporation of the Company provides for division of the Board of Directors
into three substantially equal classes. One class of directors will be elected
at each annual meeting for a three-year term. Amendments to this provision must
be approved by a two-thirds vote of all the outstanding stock entitled to vote,
and the number of directors may be changed by a majority of the entire Board of
Directors or by a two-thirds vote of the outstanding stock entitled to vote.
Meetings of the stockholders may be called only by the Board of Directors, the
Chief Executive Officer or the President, and stockholder action may not be
taken by written consent. These provisions could have the effect of discouraging
takeover attempts or delaying or preventing a change of control of the Company.
Anti-Takeover Effect of the Issuance of Preferred Stock. The Company has an
authorized class of 5,000,000 shares of preferred stock which may be issued by
its Board of Directors on such terms and with such rights, preferences and
designations as the board may determine. Issuance of such preferred stock,
depending upon the rights, preferences and designations thereof, may have the
effect of delaying, deterring or preventing a change in control of the Company.
In addition, certain "anti-takeover" provisions of the Delaware General
Corporation Law, among other things, may restrict the ability of stockholders to
effect a merger or business combination or obtain control of the Company and may
be considered disadvantageous by a stockholder. Management of the Company
presently does not intend to issue any shares of preferred stock. The preferred
stock may, however, be issued at some future date which stock might have
substantially more than one vote per share or other provisions designed to deter
a change in control of the Company. The issuance of such stock to a limited
group of management Stockholders may vest in such persons absolute voting
control of the Company, including, among other things, the ability to elect all
of the directors, and to control certain matters submitted to a vote of
Stockholders and to prevent any change in management despite performance. Also,
the shares of preferred stock may have the right to vote upon certain matters as
a separate class.
Joint Venture Risks. In October, 1995, the Company entered into an
agreement with a third party to form a joint venture (the "Venture"), in the
form of a corporation (Quantum Imaging Corporation) to develop an improved
filmless digitized imaging system. To be successful, the Venture needs to raise
at least $3,000,000 in financing.No assurance can be given that that the Venture
will raise adequate funding, that the Venture's research and development will be
successful, that the Company's interest in the Venture will not be reduced or
that the system will find profitable acceptance in the marketplace.
Future Results. This registration statement contains both historical facts
and forward-looking statements. Any forward-looking statements involves risks
and uncertainties, including but not limited to risk of product demand, market
acceptance, economic conditions, competitive products and pricing, difficulties
in product development, commercialization, and technology, and other risks. As a
result, the Company's actual future operations could differ significantly from
those discussed in the forward-looking statements.
9
<PAGE>
MATERIAL CHANGES
At a meeting held on October 12, 1996, the Company's Board of Directors
(the "Board") adopted a resolution amending, subject to shareholder approval,
the Company's Certificate of Incorporation to authorize the Board to make, alter
and repeal the Bylaws of the Company, subject to the power of the stockholders
of the Company to alter or repeal any Bylaw whether adopted by them or
otherwise. On December 4, 1996, the Corporation's shareholders approved said
amendment.
Thereafter, the Board made the following amendments to the Company's
Bylaws: (i) Article III Section 4 was amended to provide that special meetings
of the stockholders may be called at any time by the Board, the Chairman of the
Board, the Chief Executive Officer or the President of the Company, but such
special meetings may not be called by any other person or persons; (ii) Article
IV Section 1 was amended to expand the authorized number of authorized Board
members to nine; and (iii) the Board eliminated Article IX Section 5 which
provided that if any salary, commission, bonus, interest, rent, travel or
entertainment expense is disallowed in whole or in part as a deductible expense
by the Internal Revenue Service, then the employee recipient shall reimburse the
Company to the full extent of the disallowance.
The Company is currently seeking to raise approximately $2,250,000 on a
"best efforts", through the offering Units to certain accredited investors for
forty-five dollars ($45) per Unit. Each Unit consists of fifteen (15) shares of
the Company's $.02 par value common stock and Series C Warrants to purchase
three (3) shares of Common Stock at a price of $3.00 per share. The Series C
Warrants will be exercisable upon issuance and expire two years from the date of
effectiveness of a registration statement under the Securities Act of 1933 (the
"Act") covering the resale of the shares of Common Stock underlying the Series C
Warrants by the holder, which period shall be extended day-for-day for any time
that a prospectus meeting the requirements of the Act is not available. The
Company may accelerate the expiration of the Series C Warrants in the event that
the average market price of the Company's Common Stock for 10 consecutive
trading days exceeds $6.00 per share. In the event that the Company accelerates
the expiration of the Series C Warrants, the holders of the Series C Warrants
would be permitted to exercise the Series C Warrants during a period of not less
than 20 days following notice of such event. Each prospective investor must
subscribe for a minimum of 400 Units ($16,000). The Private Placement will be
open through March 20, 1997, but such term may be extended for up to 20 days by
the Company in its sole discretion.
USE OF PROCEEDS
The Company will receive no proceeds from the sale of the Securities by the
Selling Securityholders hereunder, but the Company has agreed to bear certain
expenses of registration of such Securities under federal and state securities
laws. The Company will receive proceeds when and if the Warrants and Option
Stock are exercised.
DESCRIPTION OF COMMON STOCK
The Company is authorized to issue up to 50,000,000 shares of Common Stock,
$.02 par value. All such shares have equal voting rights and are fully paid and
non-assessable. Voting rights with respect to the Common Stock are not
cumulative. Upon liquidation, dissolution or winding up of the Company, the
assets of the Company, after the payment of liabilities and after the
satisfaction of all claims by the holders of preferred stock, if any, will be
distributed pro rata to the holders of the Common Stock. The holders of the
Common Stock do not have preemptive rights to subscribe for any securities of
the Company and have no right to require the Company to redeem or purchase their
shares. Holders of Common Stock are entitled to share equally in dividends when,
as and if declared by the Board of Directors of the Company out of funds legally
available therefor after payment of any dividends to the holders of the
Company's preferred stock.
10
<PAGE>
PRINCIPAL AND SELLING SECURITYHOLDERS
Principal Securityholders
The following table sets forth certain information with respect to the
beneficial ownership of the common stock of the Company as of March 10, 1997,
for: (i) each person who is known by the Company to beneficially own more than 5
percent of the Company's common stock, (ii) each of the Company's directors,
(iii) each of the Company's Named Executive Officers, and (iv) all directors and
executive officers as a group. As of March 10, 1997 the Company had 8,744,153
shares of common stock outstanding.
<TABLE>
<CAPTION>
Name and Address Shares Beneficially Owned(2) Percentage of Shares
of Beneficial Owner(1) Beneficially Owned Position
<S> <C> <C> <C>
David A. Robinson(3) 630,219 7% President, Chief Executive
Officer Chairman of the Board and
Director
Bradley C. Robinson(4) 630,219 7% Vice President Operations and
Investor Relations and Director
Gale H. Thorne(5) 115,000 1% Vice President, Product
Development and Director
J. Clark Robinson(6) 237,000 3% Vice President , Chief Financial
Officer, Treasurer, Secretary and
Director
Gary W. Farnes(7) 70,000 1% Director
Robert R. Walker(8) 83,000 1% Director
Executive Officers and 1,765,438 19%
Directors as a Group (6
Persons)
John T. Clarke(9) 665,306 7%
Thatchetts
Camp Road
Gerrards Cross
Buckinghamshire, England
Capital Growth 938,040 10%
International(10)
11601 Wilshire Boulevard,
Suite 500
Los Angeles, CA 90025
- --------------------------
</TABLE>
(1) Except where otherwise indicated, the address of the beneficial owner is
deemed to be the same address as the Registrant.
(2) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting and
investment power with respect to the securities. Shares of common stock
11
<PAGE>
subject to options or warrants currently exercisable, or exercisable within
sixty (60) days, are deemed outstanding for computing the percentage of the
person holding such options but are not deemed outstanding for computing
the percentage of any other person.
(3) Includes 417,719 shares and stock options to purchase 212,500 shares for
each of these two persons. Does not include the Earn-Out Shares.
(4) Includes 330,219 shares and stock options to purchase 300,000 shares for
each of these two persons. Does not include the Earn-Out Shares.
(5) Includes 18,000 shares, stock options to purchase 57,000 shares and Series
A Warrants to purchase 15,000 shares. Also includes 25,000 shares that Mr.
Thorne is deemed to beneficially own through a trust.
(6) Includes 90,000 shares, stock options to purchase 75,000 shares. Also
includes 45,000 shares and Series A Warrants to purchase 27,000 shares that
Mr. Robinson is deemed to beneficially own though a trust.
(7) Includes 50,000 shares and stock options to purchase 20,000 shares.
(8) Includes stock options to purchase 20,000 shares. Also includes 63,000
shares that Mr. Walker is deemed to beneficially own through a trust.
(9) Includes 163,000 shares, stock option to purchase 300,000 shares and Series
A Warrants to purchase 3,000 shares. Also includes 18,000 shares that Mr.
Clarke is deemed to beneficially own as a result of their being owned by a
controlled entity, 123,465 shares, 18,000 Series A Warrants and 21,841
Series B Warrants owned by his spouse, and 18,000 shares owned by a minor
child, which he is deemed to beneficially own. Does not include the
Earn-Out Shares.
(10) Includes 918,040 Series B Warrants and stock options to purchase 20,000
shares of Common Stock.
The Registrant is not aware of any arrangements, the operation of which may
at a subsequent date result in a change in control of the Registrant.
Selling Securityholders
The following table provides the names of and number of shares of Common
Stock offered for sale by each Selling Securityholder. The Selling
Securityholders may sell all, some or none of their shares of Common Stock. The
following entries to the table represent, respectively, the total number of
shares which each stockholder may sell pursuant to the registration statement.
Assuming that all of the stock offered hereby is sold, no Selling Securityholder
would own more than 1% of the outstanding common stock of the Company. See also
"Principal Securityholders."
The shares of Common Stock offered by this Prospectus may be offered from
time to time by the Selling Securityholders named below. Unless otherwise noted,
no Selling Securityholder is an executive officer of the Company.
<TABLE>
<CAPTION>
Percentage of Stock Underlying
Common Stock Owned Warrants and Stock
Stock Owned as of Before Offering Stock Offered Options Offered
Name(1) March 10, 1997 Hereby Hereby
------- -------------- ------ ------
<S> <C> <C> <C> <C>
A/S Kapitalutvikling * 6,000
Magne F. Aaby 50,000 1% 50,000 30,000
AHM Eiendoms AS 10,000 * 10,000 6,000
Celia Allsop 5,000 * 5,000 3,000
Alpine Securities Corporation 1% 50,000
John G. Argitis 10,000 * 10,000 6,000
Arimo Corporation 5,000 * 5,000 3,000
Dennis & Marilyn Astrella 5,000 * 5,000 3,000
Caroline Bandlien 38,250 * 38,250
Charlotte Bandlien 38,250 * 38,250
Einar H. Bandlien 203,000 3% 203,000 30,000
12
<PAGE>
Karl Bandlien 9,000 * 9,000
Banyan Investment Company, LC 1% 77,720
Beatrice Barnett * 3,000
Gary Barnett 5,000 * 5,000 6,000
Josef A. Bauer * 30,000
Dennis Malcolm Baylin * 7,500
Michael Roy Bichan 34,497 * 34,497
Susie Elizabeth Bichan 9,000 * 9,000
Stewart & Debbie Blake * 9,000
BO Shipping AS 6,250 1%* 6,250 109,500
Bostar A.S. * 30,000
Boyd Financial Corp. 71,186 1% 71,186
Harvey R. Brice BSCC M/P Plan A/C 10,000 * 10,000 9,000
#13-3604093
Butler Investments Ltd. 147,000 3% 137,000 97,200
Cameo Trust Corp. Limited * 10,800
The Canada Trust Company 10,000 * 10,000 6,000
Capital Growth International 10% 938,040
Lisa Natalie Caplan * 600
Gregory W. Carlisle 5,000 * 5,000 3,000
M.J. Carter 10,000 * 10,000 6,000
Cartwright Holdings, Inc. 1% 110,494
Castle Rock Land & Livestock, L.C. 5,000 * 5,000 3,000
Central Investments Limited * 30,000
Charles Chamberlain 5,000 * 5,000 3,000
Louise Chamberlain 5,000 * 5,000 3,000
Chesham Consultants Ltd 18,000 * 18,000
Cristofer Clarke 18,000 * 18,000
John T. Clarke (2) 163,000 5% 73,000 303,000
Gail Victoria Clarke 68,362 1% 68,362 39,841
Michelle M.G. Clarke 44,000 1% 44,000 7,500
Thomas Clarke 70,803 1% 70,803
Willaim F. Coffin * 5,280
Robert E. Colby Jr. 60,500 1% 60,500 34,500
Corner Bank Ltd. 30,000 1% 30,000 51,000
Martin & Susan Cox 2,600 * 2,600
Credit Suisse (Guernesy) Limited * 39,000
Karen Davis * 2,000
Demachy Worms & Co. International Ltd. 1% 75,000
John Dillaway * 3,000
Edgeport Nominees Limited 356,500 5% 356,500 51,950
Egger & Co. 2% 151,500
Eurocapital Ltd * 23,100
Failor Family Trust 45,000 1% 45,000
Anders Farestveit 50,000 3% 50,000 180,000
Farnes, Gary c/f Trent Farnes 1,000 * 1,000
Gary Farnes c/f Trevor Farnes 1,000 * 1,000
Gary Wm. Farnes (2) 41,000 1% 41,000 50,000
Tami Farnes 1,000 * 1,000
Tara Farnes 1,000 * 1,000
Timothy L. Farnes 6,100 * 6,100 21,500
Tyler Farnes 2,500 * 2,500 1,500
M, Farrel 32,000 * 32,000 3,000
Alan Field 25,000 * 25,000 15,000
Alan & Susan Field 22,500 * 22,500
David Floor 5,000 * 5,000 3,000
Fred C. Follmer * 6,000
Elaine Foster 22,500 * 22,500
Nigel Foster 135,000 2% 135,000
Deborah May Fowler 2,250 * 2,250
Richard Fowler 2,250 * 2,250
Freed Investment Company 10,000 * 10,000 6,000
David L. Freed Family Trust 5,000 * 5,000 3,000
David W. Freed 10,000 * 10,000 6,000
John & Karen Freed 10,000 * 10,000 6,000
13
<PAGE>
Paul L. Freed 5,000 * 5,000 3,000
Peter Q. Freed 10,000 * 10,000 6,000
Robert E. Freed Family Trust 10,000 * 10,000 6,000
Jack Freidman 25,000 * 25,000 15,000
G-Men, Inc. 20,000 * 20,000 12,000
Galway Capital Limited 180,000 2% 180,000
Genevalor Trusteeship & Management 190,214 5% 190,214 210,000
Corp.
Jeremy A. Gilbert 5,000 * 5,000 3,000
Paul Glass * 4,500
Judy Goodstein 9,800 * 9,800
John J. Gottsman * 15,000
Gillian Margaret Gray 25,000 * 25,000 15,000
Michael John Gray 25,000 * 25,000 15,000
Susan Greenberg 5,000 * 5,000 6,000
Tad Gygi 9,000 * 9,000
Arnfin Haavik 123,000 1% 123,000
Turid Nordal Haavik 18,000 * 18,000 9,000
Gail Healey 55,103 1% 55,103
Kevin Healey 1,000
Pearl Healey 1,000
Timothy Healey 1,000
John & Lenore Heckler 3,500 * 3,500 3,000
Arne Hellesto * 30,000
Tom Henriksen * 3,000
Heptagon Investments Ltd. * 15,000
Daniel M. Herscher, Trustee, Daniel M. 5,000 * 5,000 3,000
Herscher, Esq., Retirement Plan
Trust
Hill Oldridge Ltd. Pension Fund 8,500 * 8,500
Julian Hill 3,600 * 3,600
Hollis Holding A/S 8,000 * 8,000 6,000
Nils Otto Holmen 25,000 * 25,000 15,000
Simen Horne 10,000 * 10,000 6,000
Charlotte Horowitz 5,000 * 5,000 9,000
Charlotte Horowitz IRA 10,000 10,000
Svein Huse 50,000 1% 50,000 30,000
Hutton International SA 50,000 1% 50,000 30,000
Intl. Asso. of Christian Prof. 45,000 1% 45,000
George Anthony Jackson 22,500 * 22,500
Mary Jackson 22,500 * 22,500
Michael S. Jacobs 5,300 * 5,300 7,500
Allan D. Jacobson IRA 12,500 * 12,500 7,500
Lenard E. Jacobson, M.D. * 9,000
Fiona Samantha Jane * 3,500
Jennings Asset Group III * 7,500
Steinar Schei Johansen 13,500 * 13,500
Svein E. Johansen 109,000 1% 109,000 6,000
Torgeir Schei Johansen 13,500 * 13,500
Maria Elizabeth Jones * 1,000
Margaret Joseph 12,600 * 12,600
Ted Kaminer & Hillary Kahn Jtnros 2,000 * 2,000 3,000
Mark E. Karp 9,000 * 9,000
Kaufman & Leinberger Investments, Inc. 5,000 * 5,000 3,000
Inga Jane Kempton 9,000 * 9,000
Vance Kirby 15,000 * 15,000 9,000
Ronald B. Koenig * 7,500
Pierre & Francoise Lambert * 6,000
Andrew Paul Lampert 10,000 * 10,000 6,000
Barbara C. Langham 2,000 * 2,000 3,000
Charles J. Charlayne E. Lasky 10,000 * 10,000 6,000
Legal and Equitable Pension Fund * 9,000
J. Matt Lepo 5,000 * 5,000 3,000
Dr. J. K. Lewinsohn 43,143 1% 43,143
M.R. Lewinsohn 120,500 3% 120,500 150,000
Claus Lian 25,000 * 25,000 15,000
Rabbe E. Lund 42,700 1% 42,700 30,000
14
<PAGE>
Mamimu Ltd. * 7,500
K Mason 8,000 * 8,000
Joseph & Lillian Matulich 2,500 * 2,500 1,500
Albert Maturo & Josephine Maturo 5,000 * 5,000
Chris Maturo * 3,000
Metropolitan Finance Limited 53,000 1% 53,000 15,000
Eugene J. Meyers * 7,500
Neil P. Micklethwaire 15,000 * 15,000 9,000
George H. Miller 7,000 * 7,000 3,000
Peter Mills * 9,000
Wenche Moe 15,000 * 15,000 9,000
Marie-Pascale Molema 23,000 * 23,000 15,000
Michael & Nancy Morris * 1,563
Tracy Moss 24,000 * 24,000 12,000
Joe & Sandra Motzkin 6,000 * 6,000 7,500
Nap Enterprises Limited 32,357 * 32,357
Napier Brown Holdings Ltd. 1% 45,000
Nancy and Clyde Needham 11,500 * 11,500 1,500
Mark Nelson 20,000
Anne & Harry Newman 10,000 * 10,000 6,000
Norman Assurance AS 182,500 2% 182,500
Harald Norman 2% 217,500
Oistein Nyberg * 9,000
Joan O'Gorman 13,500 * 13,500
Sigurd Olsvold 5,000 * 5,000 3,000
Oral & Maxillofacial Surgical 96,333 1% 96,333
Association
Bonita Michelle Overlander 11,700 * 11,700
Clive Overlander 16,700 * 16,700 3,000
Carolyn Owen 2,500 * 2,500 1,500
Owen, Charles V. 2,500 * 2,500 31,500
Raymond H. Owen 5,000 * 5,000 3,000
Perwick Holdings Limted 1% 115,024
Morten Poulsson 25,000 * 25,000 15,000
PQF Investments 5,000 * 5,000 3,000
Prime Grieb & Co., Limited * 5,100
Prodeco Capital Corporation 150,000 3% 150,000 90,000
Elizabeth Diane Pummell 2,500 * 2,500 1,500
Martyn James Pummell 25,000 * 25,000 15,000
Derek Reddin-Clancy 7,200 * 7,200
Mary-Pat Reddin-Clancy 10,800 * 10,800
David A. Rees 20,000 * 20,000 15,000
John E. Reihl 5,000 * 5,000 3,000
Lawrence Reineke 1% 50,000
Republic National Bank * 27,000
Devin Rhoton * 3,000
John Laurence Richardson 5,000 * 5,000
Patrick George Ridgwell 10,000 * 10,000 30,000
Andrew Kent Robertson * 30,000
Brad Robinson(2) 330,219 7% 240,219 300,000
David Robinson(2) 417,719 7% 327,719 212,500
J. Clark Robinson(2) 90,000 2% 90,000 75,000
J. Clark Robinson, Trustee Robinson 45,000 1% 45,000 27,000
Family Trust(2)
Steffanie Robinson * 10,000
Stephen L. Robinson 12,500 * 12,500 7,500
Charles & Marilyn Roellig 5,000 * 5,000 3,000
Josephine F. Rose Family Trust 5,000 * 5,000 3,000
Ruth W. Rose 900 * 900
Gerald Rosen 7,500 * 7,500 4,500
Brian Stuart Roth 42,300 1% 42,300 4,500
Brian Stuart Roth in Trust 1 FBO Laura 8,000 * 8,000
Jane Roth
Brian Stuart Roth in Trust 2 FBO Lucie 8,000 * 8,000
Claire Roth
Nicholas Leigh Roth 11,500 * 11,500
15
<PAGE>
Nigel James Roth 11,500 * 11,500
Suzan Irene Roth 48,550 1% 48,550 3,750
Michel Roy 5,000 * 5,000 3,000
Cheryl Lynn Rubin 32,000 * 32,000 3,000
Pierre Rudman * 3,063
Allan Rudnick IRA Rollover * 6,000
S.P. Angel Nominees 22,500 1%* 12,500 87,500
Saracen Int. Inc. * 15,000
Barry A. Saunders 27,000 * 27,000
Skull Valley Company, Ltd. 10,000 * 10,000 6,000
Lynette Small 5,000 * 5,000
Karen Elizabeth Smith 119,500 2% 119,500 20,000
Phillip Smith 9,000 * 9,000
Fred Snitzer * 9,000
Snowboard Stiftung * 30,000
Robert & Claudia Sorrentino 18,667 * 18,667
Spellord, Inc. * 15,000
Standard Acre SA * 3,125
Marla Stegen * 4,000
Brian Sutherland 1% 50,000
Svien Erik Stiansen 25,000 * 25,000 15,000
Torill Stiansen 9,000 * 9,000
Stolzoff Family Trust 30,000 1% 30,000 30,000
Gary Stolzoff 12,500 * 12,500 7,500
Gary Stout * 15,000
Karl Sivert Sunde 10,000 * 10,000 6,000
Swiss American Sec., Ltd 71,000 1% 45,000
The Chase Manhattan Bank NA 7,500 * 7,500
The First National Bank of Chicago *
The Joseph Accumulation & Maintenance 9,000 * 9,000
Settlement
Bruce W. Thorne 900 * 900
Craig N. Thorne 900 * 900
David L. Thorne 5,900 1% 5,900 38,000
Gale H. Throne, Trustee of Gale H. 25,000 * 25,000
Throne Trust(2)
Gale H. Thorne (2) 18,000 2% 18,000 130,000
Gale H. Thorne, Jr. 5,900 * 5,900 33,000
Kendall P. Thorne 900 * 900
Michael L. Thorne 900 * 900
Steven D. Thorne 900 * 900
Leslie Thorne 10,000 * 10,000 6,000
Olve Torvanger 126,000 1% 126,000
Richard Trew 19,800 * 11,800
Nils N. Trulsvik 112,500 1% 112,500 4,500
Michael Vanderhoof 5,000 * 5,000 3,000
Vital Milj AS 2%* 172,600
Vineyard Point Road Assoc. 25,000 * 25,000 15,000
Robert R. Walker(2) * 50,000
Robert R. Walker, Gen. Partner of 63,000 1% 63,000
Robert R. Walker Investment LTD
Partnership(2)
Sidsel O.Walker 16,500 * 16,500 4,500
Steve Wallitt * 3,000
Jill Washburn * 5,000
Allan Weissglass 20,000 * 20,000 15,000
Joel S. Weissglass 20,000 * 20,000 12,000
Anthony Neal Wenham 4,500 * 4,500
David John Wenham 23,000 * 23,000 3,000
James Robert Wenham 4,500 * 4,500
Valerie Ann Wenham 23,000 * 23,000 3,000
Lago Wernstedt 20,000 * 20,000 12,000
Ann Marie Whiting 5,400 * 5,400
Audrey Doreen Whiting 5,400 * 5,400
John Wilkinson 28,500 * 28,500
Joseph A. Wilkinson * 6,000
16
<PAGE>
Kathryn Wilson 4,500 * 4,500
David & Susan Wilstein, Trustees of * 15,000
Century Trust
Roy Vincent Wright 15,000 * 15,000 9,000
Jim Yardley 4,000 * 4,000
Totals 6,301,603 5,959,603 5,845,205
</TABLE>
* Less than 1% (rounded to the nearest percentage)
- ---------------
(1) For purposes of this table, ownership with respect to a Securityholder does
not include shares of Common Stock beneficially owned but held by other
persons shown in this table.
(2) Indicates employee or director of the Company or of SHP during the past
three years.
PLAN OF DISTRIBUTION
The shares of Common Stock offered hereby may be sold from time to time by
the Selling Securityholders, or by pledgees, donees, transferees or other
successors in interest. Such sales may be made in the Over-the-Counter market or
on Nasdaq on terms to be determined at the time of such sales. The Selling
Securityholders may also make private sales directly or through a broker or
brokers. Alternatively, the Selling Securityholders may from time to time offer
shares of Common Stock offered hereby to or through underwriters, dealers or
agents, who may receive consideration in the form of discounts and commissions;
such compensation, which may be in excess of normal brokerage commissions, may
be paid by the Selling Securityholders and/or purchasers of the shares of Common
Stock offered hereby for whom such underwriters, dealers or agents may act. The
Selling Securityholders and any dealers or agents that participate in the
distribution of the shares of Common Stock offered hereby may be deemed to be
"underwriters" as defined in the Securities Act and any profit on the sale of
such shares of Common Stock offered hereunder by them and any discounts,
commissions or concessions received by any such dealers or agents might be
deemed to be underwriting discounts and commissions under the Securities Act.
The aggregate proceeds to the Selling Securityholders from sales of the
Securities offered by the Selling Securityholders hereby will be the purchase
price of the Securities less any broker's commissions.
The Common Stock issuable upon exercise of the Warrants and Stock Options
and offered hereby will be issued by the Company to holders of Warrants and
Stock Options from time to time pursuant to exercise of such Warrants and Stock
Options in accordance with the terms thereof.
The Company anticipates keeping this Registration Statement current until
all of the Securities are sold or effectively become freely tradable. The
Company may from time to time notify the Selling Security holders that the
Registration Statement is not current and that as sales of the Securities may
not occur until the Prospectus is supplemented by sticker or amendment, as is
appropriate.
To the extent required, the specific Securities to be sold, the names of
the Selling Securityholders, the respective purchase prices and public offering
prices, the names of any agent, dealer or underwriter, and any applicable
commissions or discounts with respect to a particular offer will be set forth in
an accompanying Prospectus Supplement or, if appropriate, a post-effective
amendment to the Registration Statement of which this Prospectus is a part.
The Securities offered hereby may be sold from time to time in one or more
transactions at a fixed price, which may be changed, or at varying prices
determined at the time of such sale or at negotiated prices.
In order to comply with the securities laws of certain states, if
applicable, the Securities offered hereby will be sold in such jurisdictions
17
<PAGE>
only through registered or licensed brokers or dealers. In addition, in certain
cases Securities may not be sold unless they have been registered or qualified
for sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.
Under applicable rules and regulations under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), any person engaged in the distribution of
the Common Stock offered hereby may not simultaneously engage in market making
activities with respect to the Securities for a period of two business days
prior to the commencement of such distribution. In addition, without limiting
the foregoing, the Selling Securityholders will be subject to applicable
provisions of the Exchange Act and the rules and regulations thereunder,
including, without limitation, Regulation M, which provisions may limit the
timing of purchases and sales of Securities by Selling Securityholders.
The Company has agreed to indemnify certain Selling Securityholders against
certain liabilities, including liabilities under the Securities Act.
<PAGE>
===================================== =====================================
No dealer, sales representative,
or any other person has been
authorized to give any information or
to make any representations in
connection with this offering other
than those contained in this
Prospectus, and if given or made,
such information or representation
must not be relied upon as having
been authorized by the Company or any
of the Selling Securityholders. This 11,804,853 Shares of Common Stock
Prospectus does not constitute an
offer to sell or a solicitation of an
offer to buy any securities other
than the securities to which it
relates; not does it constitute an
offer to sell, or a solicitation of
an offer to buy, any of the
securities covered by this Prospectus SPECIALIZED HEALTH
by the Company or any of the Selling PRODUCTS INTERNATIONAL,
Securityholders in any state to any INC.
person to whom it is unlawful for the
Company of the Selling
Securityholders to make such offer or
solicitation. Neither the delivery of
this Prospectus nor any sale made
hereunder shall, under any
circumstances, create an implication
that there has been no change in the
affairs of the Company or that _____________
information contained herein is PROSPECTUS
correct as of any time subsequent to -------------
the date hereof.
----------------------
TABLE OF CONTENTS
Page
Available Information............. 2
Incorporation of Certain
Documents By Reference....... 2
Prospectus Summary................ 3
The Company....................... 3
The Offering...................... 3
Risk Factors...................... 4
Material Changes.................. 10
Use of Proceeds................... 10
Description of Securities......... 10
Principal And Selling
Securityholders.............. 11
Plan of Distribution.............. 17
----------------------------
---------------------
__________ , 19__
===================================== =====================================
===================================== =====================================
===================================== =====================================
19
<PAGE>
PART II
Item 14. Other Expenses of Issuance and Distribution.
Set forth below is an estimate of the fees and expenses payable by the
Company in connection with the issuance and distribution of the shares of Common
Stock:
Securities and Exchange Commission registration fee............. $10,660
NASDAQ listing fee.............................................. 0
Blue Sky fees and expenses...................................... 0
Printing expenses............................................... 3,000
Legal fees and expenses......................................... 15,000
Accounting fees and expenses.................................... 1,500
Transfer Agent fees............................................. 2,000
Miscellaneous................................................... 3,000
===================
Total...................................................... $35,160
===================
---------------
The Selling Securityholders will pay all applicable stock transfer taxes,
transfer fees and related fees and expenses.
Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law (the "DGCL") permits
the Company to indemnify its directors, officers, employees and agents, subject
to certain conditions and limitations. Article Ninth of the Company's Restated
Certificate of Incorporation states:
To the fullest extent permitted by the laws of the State of Delaware
now or hereafter in force, no director of this corporation shall be
personally liable to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director. Any repeal or
modification of the foregoing provisions of this Article NINTH shall not
adversely affect any right or protection hereunder of any person in
respect of any act or omission occurring prior to the time of such repeal
or modification. The provisions of this Article NINTH shall not be deemed
to limit or preclude indemnification of a director by the corporation for
any liability of a director which has not been eliminated by the
provisions of this Article NINTH.
Article XI of the Company's Bylaws requires the Company to indemnify
officers, employees and agents (collectively "Agents") to the full extent
permitted by the DGCL. The Company has also entered into Indemnity Agreements
with its officers pursuant to which the Company has agreed to indemnify them.
The Indemnity Agreements require payment of any amount which an indemnitee is
legally obligated to pay because of claims relating to his or her service as an
officer, although in many circumstances such indemnification would be
discretionary. The Indemnity Agreements also provide that the Company will have
the burden of proving that the applicable standard of conduct has not been met.
However, Company is not obligated to make any payment prohibited by law or to
pay where payment is made to an indemnitee under an insurance policy or
otherwise.
The Company's Bylaws, together with the Indemnity Agreements, expand the
Company's indemnity obligations to the full extent permitted by law. While
Delaware law contemplates some expansion of indemnification beyond what is
specifically authorized by the DGCL, the courts have not yet established the
boundaries of permissible indemnification.
The Company and its directors and officers are also covered by liability
insurance coverage.
Item 16. Exhibits.
(a) Exhibits.
The following is a complete list of Exhibits filed or incorporated by
reference as part of this Registration Statement.
11-1
<PAGE>
Exhibit No. Description Page
4.1 Form of Series A Warrant (Incorporated by reference to
Exhibit 4.1 of the Company's Annual Report on Form
10-K, dated December 31, 1995.)
4.2 Form of Series B Warrant (Incorporated by reference to
Exhibit 4.2 of the Company's Annual Report on Form
10-K, dated December 31, 1995.)
5.1* Opinion of Blackburn & Stoll, LC
23.1* Consent of KPMG Peat Marwick LLP, Independent Certified
Public Accountants
23.2 Consent of Blackburn & Stoll, LC (included in Exhibit
5.1 hereto)
24.1 Powers of Attorney (included in Part II of this
Registration Statement)
* To be filed by amendment.
---------------
(b) Financial Statement Schedules.
None.
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the Securities
Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the, the changes in
volume and price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in the
effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section
do not apply if the registration statement is on Form S-3, Form S-8 or Form F-3,
and the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain aggregate unsold at the termination
of the offering.
11-2
<PAGE>
(4) If the registrant is a foreign private issuer, to file a post-effective
amendment to the registration statement to include any financial statements
required by ss.210.3-19 of this chapter at the start of any delayed offering or
throughout a continuous offering. Financial statements and information otherwise
required by Section 10(a)(3) of the Act need not be furnished, provided that the
registrant includes in the prospectus, by means of a post-effective amendment,
financial statements required pursuant to this paragraph (a)(4) and other
information necessary to ensure that all other information in the prospectus is
at least as current as the date of those financial statements. Notwithstanding
the foregoing, with respect to registration statements on Form F-3, a
post-effective amendment need not be filed to include financial statements and
information required by Section 10(a)(3) of the Act or ss.210.3-19 of this
chapter if such financial statements and information are contained in periodic
reports filed with or furnished to the Commission by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Form F-3.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE>
================================================================================
================================================================================
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Bountiful, State of Utah,
on March 17, 1997.
SPECIALIZED HEALTH PRODUCTS INTERNATIONAL, INC.:
By /s/ David A. Robinson
David A. Robinson, President, Chief Executive Officer and
Director
We the undersigned, directors and officers of Specialized Health Products
International, Inc. (the "Company"), do hereby severally constitute and appoint
David A. Robinson and Bradley C. Robinson, and each of them, our true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign and all amendments or post-effective amendments to this
Registration Statement, and to file the same with all exhibits thereto, and all
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys and agents, and each or any of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that the said
attorneys-in-fact and agents, and each of them, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons on behalf
of the registrant in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Bradley C. Robinson Director and Vice President March 17, 1997
- -------------------------------------
Bradley C. Robinson
/s/ J. Clark Robinson Director, Vice President, Chief Financial Officer and March 17, 1997
- ---------------------------------------
J. Clark Robinson Secretary (Principal Financial and Accounting Officer)
/s/ Gale H. Thorne Director and Vice President March 17, 1997
- ---------------------------------------
Gale H. Thorne
/s/ Gary W. Farnes Director March 17, 1997
- ---------------------------------------
Gary W. Farnes
/s/ Robert R. Walker Director March 17, 1997
- ---------------------------------------
Robert R. Walker
</TABLE>
<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
EXHIBITS
to
FORM S-3 REGISTRATION STATEMENT
Under the Securities Act of 1933
---------------
SPECIALIZED HEALTH PRODUCTS INTERNATIONAL, INC.
<PAGE>
Exhibits.
The following is a complete list of Exhibits filed or incorporated by
reference as part of this Registration Statement.
.
Exhibit No. Description Page
4.1 Form of Series A Warrant (Incorporated by reference to
Exhibit 4.1 of the Company's Annual Report on Form
10-K, dated December 31, 1995.)
4.2 Form of Series B Warrant (Incorporated by reference to
Exhibit 4.2 of the Company's Annual Report on Form
10-K, dated December 31, 1995.)
5.1* Opinion of Blackburn & Stoll, LC
23.1* Consent of KPMG Peat Marwick LLP, Independent Certified
Public Accountants
23.2 Consent of Blackburn & Stoll, LC (included in Exhibit
5.1 hereto)
24.1 Powers of Attorney (included in Part II of this
Registration Statement)
* To be filed by amendment.
---------------
